Bill Ackman has invested in Microsoft, with the details of the investment set to be revealed today.

      Pershing Square has established a new stake in Microsoft, with the exact size to be revealed in a 13F filing later on Friday. The stock has dropped approximately 16% since the beginning of the year.

      Bill Ackman has acquired Microsoft shares. On Friday morning, the chief executive of Pershing Square announced via X that the fund had taken a new position in the software firm following its recent stock price drop, with specifics to be included in a regulatory filing later that day.

      Ackman explained that he believes the market is misvaluing the company's enterprise business, as opposed to its AI division. He stated that investors have undervalued Microsoft’s software due to its integral role in enterprises and appealing price-value proposition, presenting the position as a quality-compounder investment focused on its installed base rather than a directional bet on Azure capital expenditures.

      The timing is key for this trade. Microsoft shares have fallen about 16% this year and have remained around $413 since late April, when CFO Amy Hood raised the full-year capital expenditure guidance to about $190 billion based on the company’s fiscal Q3 results, significantly exceeding the approximate $155 billion analysts had forecasted.

      The results were indeed strong, with a 40% increase in Azure, an AI run-rate of $37 billion, and total revenue surpassing $82.9 billion. However, the stock still declined, attributed to what was described in a widely circulated buy-side note as the $190 billion capex plan impacting AI valuations.

      This is not Ackman’s first similar move this year; he had previously taken a position in Meta in February, shortly after the company experienced a sell-off linked to capital expenditure concerns, which Ackman characterized at the time as a 'deeply discounted valuation'.

      The move into Microsoft follows a similar pattern: a large-cap company facing pressure from AI spending guidance, which Ackman views as an opportunity to invest in a high-quality franchise at a temporarily reduced valuation multiple.

      Funds with over $100 million in assets are mandated to submit Form 13F disclosures of US-listed positions within 45 days following the end of the quarter, making Friday a significant day for hedge fund analysis.

      Pershing Square’s most recent 13F, covering the December quarter, listed eleven positions and approximately $16 billion in US holdings, primarily in Brookfield, Uber, Amazon, Alphabet, and Meta, with no mention of Microsoft. Today's filing will reveal if the firm has reduced any existing positions to accommodate the new acquisition or if it was funded with cash reserves.

      This trade also comes amid a broader discussion about AI infrastructure. Hyperscalers have pledged over $650 billion towards AI capital expenditures through 2026, based on Q1 figures from Microsoft, Alphabet, Amazon, Meta, and Apple, and the market is currently evaluating when, or if, this spending will translate effectively into operating earnings.

      Ackman is essentially arguing that Microsoft’s current Office, Windows, and Azure business is sufficient to meet performance expectations, independent of AI potential. Microsoft's extensive integration of OpenAI's models into Copilot, Azure, and its developer tools has been a significant factor in the company’s valuation shift over the past three years. The capital expenditure is seen as the cost of maintaining that advantage, and Ackman’s position suggests that the enterprise software segment is receiving less recognition than it deserves.

      Pershing Square has not revealed the size or average purchase price of its position as of now. The 13F filing is anticipated later today in US time.